Powers of Attorney

Planning for the management of your property: The Benefits of General Powers of Attorney

Everyone needs to face the reality that at some time in the future, he or she may become physically or mentally disabled and be unable to manage his or her property and affairs. The quickest, most inexpensive and least burdensome vehicle for addressing the problem is the General Power of Attorney. It is a document in which authority is given to a trusted family member or friend to allow him to act for you. It can come into effect the moment it is signed, or only at some later time when the issue of your disability has been medically documented. The vast majority are the former type, as the person named to act (the “agent”) is usually a close family member or friend and the danger of its improper use is therefore minimal.

General Powers are to be distinguished from Health Care Powers of Attorney, which deal with medical — not property — matters.

General Powers of Attorney are wordy documents that attempt to permit the agent to do virtually anything the grantor of the power (the “principal”) could do in the absence of disability. Sometimes powers are limited in scope or tailored to fit specific circumstances. They will usually remain in effect indefinitely, although it is highly advisable to execute new ones every few years. A potential disadvantage is that they may not be recognized by the person or organization to whom they are presented, often a bank or brokerage firm. In that case, it may be necessary to opt for the more cumbersome, but 100 percent authoritative, guardianship alternative.

It is important to remember that a General Power of Attorney must be in place BEFORE the disability begins. When disability reaches a severe stage, the principal does not have the mental — and legal — capacity to execute a General Power of Attorney.

I will be happy to discuss General Powers of Attorney with you — what they can do and cannot do, the limits of their effectiveness, how they can be customized to your particular situation and the best person to serve as your agent.

General Powers of Attorney have been a staple of the estate planning process for the many years I have been practicing. Please give me a call if you want to know more.

If you want to look into the subject of General Powers of Attorney, please call me at (410) 573-2992 or email me anytime.